HANGZHOU, capital of the province, southern terminus of the Grand Canal, and one of China's leading tourist attractions, lies in the north of Zhejiang at the head of Hangzhou Bay. The canal has been the instrument of the city's prosperity and fortunes, establishing it for more than a thousand years as a place of great wealth and culture. Apart from the fact that Yu the Great, tamer of floods, is said to have moored his boats here, however, Hangzhou has little in the way of a legendary past or ancient history for the simple reason that the present site, on the east shore of Xi Hu (West Lake), was originally under water. Xi Hu itself started life as a wide shallow inlet off the bay, and it is said that Emperor Qin Shihuang sailed in from the sea and moored his boats on what is now the northwestern shore of the lake. Only around the fourth century AD did river currents and tides begin to throw up a barrier of silt which eventually resulted in the formation of the lake.

However, the city rapidly made up for its slow start. The first great impetus came from the building of the Grand Canal at the end of the sixth century, and Hangzhou developed with spectacular speed as the centre for trade between north and south, the Yellow and Yangzi river basins. Under the Tang dynasty it was a rich and thriving city, but its location between lake and river made it vulnerable to the fierce equinox tides in Hangzhou Bay. When Tang-dynasty governors were building locks and dykes to control the waters round Hangzhou, a contemporary writer, describing the beginning of a sea wall in 910 AD, explained that "archers were stationed on the shore to shoot down the waves while a poem was recited to propitiate the King of Dragons and Government of the Waters; the waves immediately left the wall and broke on the opposite bank so the work could go on." The problem of floods - and the search for remedies - was to recur down the centuries.

During the Song dynasty , Hangzhou received its second great impetus when the encroachment of the Tartars from the north destroyed the northern capital of Kaifeng and sent remnants of the imperial family fleeing south in search of a new base. The result of this upheaval was that from 1138 until 1279 Hangzhou became the imperial capital . There was an explosion in the silk and brocade industry, and indeed in all the trades that waited upon the court and their wealthy friends. When Marco Polo wrote of Hangzhou towards the end of the thirteenth century, he spoke of "the City of Heaven, the most beautiful and magnificent in the world. It has ten principal market places, always with an abundance of victuals, roebuck, stags, harts, hares, partridge, pheasants, quails, hens and ducks, geese? all sorts of vegetables and fruits? huge pears weighing ten pounds apiece. Each day a vast quantity of fish is brought from the ocean. There is also an abundance of lake fish." So glorious was the reputation of the city that it rapidly grew overcrowded. On to its sandbank Hangzhou was soon cramming more than a million people, a population as large as that of Chang'an (Xi'an) under the Tang, but in a quarter of the space - tall wooden buildings up to five storeys high were crowded into narrow streets, creating a ghastly fire hazard.

After the Southern Song dynasty was finally overthrown by the Mongols in 1279, Hangzhou ceased to be a capital city, but it remained an important centre of commerce and a place of luxury, with parks and gardens outside the ramparts and hundreds of boats on the lake. In later years, the Ming rulers repaired the city walls and deepened the Grand Canal so that large ships could go all the way from Hangzhou to Beijing. Two great Qing emperors, Kangxi and Qianlong, frequented the city and built villas, temples and gardens by the lake. Although the city was largely destroyed by the Taiping Uprising (1861-63), it recovered surprisingly quickly, and the foreign concessions which were established towards the end of the century - followed by the building of rail lines from Shanghai and Ningbo - stimulated the growth of new industries alongside the traditional silk and brocade manufacturers.

Since 1949 the city has grown to attain a population of around one million, much the same as under the Song. As is often the case in China, the modern city is not of much interest in itself, but Xi Hu and its shores still offer wonderful Chinese vistas of trees, hills, flowers, old causeways over the lake, fishing boats, pavilions and pagodas - all within a walk of the city centre. No tour of China would be complete without coming here and appreciating the lake's stunning natural beauty - still largely intact despite the ever-increasing flood of tourists - and its subsequent impact on the evolution of Chinese literature and culture. Today, understandably, Hangzhou is one of China's busiest resorts, particularly at weekends and in summer, when the city is packed with trippers escaping from the concrete jungle of Shanghai. This has pushed up hotel prices, but it also brings advantages: there are plenty of restaurants, the natural environment is being protected and the bulk of the Taiping destruction on the lakeside has been repaired (the temples rebuilt and the gardens replanted). Most of the places to visit are on the lake or immediately around its shores, and can be visited on foot or bicycle; for those attractions farther afield city buses are very convenient.